Every broker has to fill your orders somehow. How they do it — their execution model — affects your costs, your fills and potential conflicts of interest.
Market maker (dealing desk)
A market maker takes the other side of your trade, quoting its own bid and ask prices. Advantages include fixed or stable spreads, no commissions and instant fills on small trades. The main drawback is a potential conflict of interest, as the broker profits when clients lose. Reputable, well-regulated market makers hedge their exposure and are perfectly safe to use.
STP (straight-through processing)
An STP broker passes your orders directly to liquidity providers such as banks, usually adding a small markup to the spread. There is no dealing desk, and pricing is variable.
ECN (electronic communication network)
An ECN broker connects you to a network of liquidity providers and other participants. You see raw interbank spreads — often 0.0 pips on EUR/USD — and pay a fixed commission per lot instead.
| Market Maker | STP | ECN | |
|---|---|---|---|
| Spreads | Fixed / wider | Variable + markup | Raw, from 0.0 pips |
| Commission | Usually none | Usually none | Yes (~$3–$3.50 per side) |
| Best for | Beginners, small accounts | Swing traders | Scalpers, EAs, high volume |
Which should you choose?
- Scalpers and algorithmic traders — choose an ECN broker. See our list of the best ECN brokers.
- Beginners — a regulated market maker with micro accounts is fine.
- Swing traders — total cost matters less; focus on regulation and platform.
Compare real all-in costs across brokers with our broker comparison tool.